28 August 2017
Update
| Sector:
Technology
BSE SENSEX
31,596
S&P CNX
9,857
Infosys
Buy
CMP: INR913
TP: INR1,050(+15%)
Steadfast peace with the arrival of Mr. Nandan Nilekani
Addresses risk of further downside; more to do for gradual valuation re-rating
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
INFO IN
2,297
1081 / 862
-6/-19/-26
2,087.0
32.5
3831
87.3
Infosys (INFO) announced the appointment of Mr. Nandan Nilekani as non-executive
non-independent Chairman of the Board.
It also accepted the resignation of Mr. R. Seshasayee, Professor Jeffrey Lehman and
Professor John Etchemendy with immediate effect.
Dr. Sikka too stepped down as Executive Vice Chairman and as a Director.
With Nandan Nilekani as Chairman, Ravi Venkatesan stepped down as the Co-
Chairman of the Board; he would however continue as an Independent Director.
Financials Snapshot (INR b)
Y/E Mar
2017 2018E 2019E
Sales
684.9 706.5 781.8
EBITDA
186.1 184.6 203.4
PAT
143.8 142.2 153.6
62.9
62.2
67.2
EPS (INR)
6.6
-1.1
8.0
EPS Gr. (%)
22.0
19.6
19.3
RoE (%)
22.0
19.6
19.3
RoCE (%)
40.9
48.2
50.6
Payout (%)
14.5
14.7
13.6
P/E (x)
Div Yield (%)
2.8
3.3
3.7
Shareholding pattern (%)
Jun-17 Mar-17 Jun-16
As On
Promoter
12.8
12.8
12.8
DII
20.2
20.3
17.3
FII
38.0
38.8
41.0
Others
29.0
28.1
29.1
FII Includes depository receipts
Stock Performance (1-year)
Infosys
Sensex - Rebased
1,250
1,150
1,050
950
850
What do the developments mean for Infosys, the stock?
Steadfast return of peace puts downside risks behind
At 14.6x FY18E and 13.6x FY9E earnings, only continued brawl in the open and
prolonged Board and leadership uncertainty presented further downside risk.
But INFOs steadfast actions around the near-dissolution of the Board and
return of Mr. Nandan Nilekani – the consensus choice in the scenario – has
taken care of that risk.
The fact that it took only a week for this to play out, is a positive, as INFO can
now look forward to addressing business issues.
Response to a few tough questions will determine the extent of upside
Who could be INFO’s new CEO?
INFO’s founder team collectively distanced itself from any role in the company
when Dr. Sikka came in, as it was deemed necessary to attract a high caliber
leader. The scenario this time prima-facie appears to be the opposite. Mr. Nilekani
is on the board, and new appointments to the Board may have no less founder
influence. The overpowering thought for any prospect will be the extent of free
hand he / she will enjoy in the business – when it comes to matters such as
employee compensations, strategic acquisitions and valuations thereof, etc. Also, it
remains to be seen whether the current think-tank believes that an internal
candidate may be better suited for the role. INFO’s long term attractiveness will
undoubtedly hinge on the new leader.
Panaya investigation documents – what next here?
Developments on this issue will be interesting, given that it was the latest bone of
contention between Mr. Murthy and the Board. Nandan’s return has received
Murthy’s thumbs-up, but if retracting from this demand will be perceived as
inconsistent pitch for governance, and continued demand could open up multiple
possibilities. One such is that if the documents are made public, and there is clear
instance of wrong-doing, it leads to follow-up course of actions detrimental to
INFO in the near future. Is there a middle path here? This will attract media
interest contrary to Nandan’s wish of getting dull and boring soon.
Ashish Chopra – Research Analyst
(Ashish.Chopra@MotilalOswal.com); +91 22 6129 1530
Sagar Lele – Research Analyst
(Sagar.Lele@MotilalOswal.com); +91 22 6129 1531
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.

Infosys
Possible downward revision of earnings growth
First steps have been swift, but expecting similar execution around the constitution
of the Board and appointment of new CEO may just be asking for too much. Plus,
there are a lot of personnel brought on-board by the previous leadership, many of
them based overseas, who will be compelled to reassess their stay within the
company – such a shake-up is not unusual in reaction to the events of this nature. In
the interim, the distractions that admittedly hurt INFO’s performance in last couple
of quarters have been at their peak in this one, and hence, the impact on business is
natural. As a result, the run-up in the stock will be tested with the company’s
commentary around the outlook in the near term.
Expect recoupment of some lost ground on valuations
Nandan cited that there are no second thoughts on the Buyback, that will
compound to swift movement on the changes and drive some positive reaction
on the stock, a relief rally after the sharp fall.
We had lowered our price target to INR1,050, by cutting the target multiple to
15x (from 17x), at some discount to TCS’ 16x. That will unlikely be breached for
now, with the sleuth of changes yet to take place, but offers upside from current
13.6x.
However, further re-rating needs to see a combination of: [1] The back of search
process and focus on business growth, [2] At least comparable performance to
those setting the industry pace.
Exhibit 1: Comparative valuation
Company Mkt cap Rating
(USD b)
TCS
72.9 Neutral
Infosys
31.5 Buy
Wipro
21.2 Neutral
HCL Tech
18.8 Neutral
TechM
6.2 Buy
TP
Upside
EPS (INR)
(INR)
(%) FY18E FY19E FY20E
2,350
-5.2 131.3 143.0 148.8
1,050 15.0
62.2
67.2
74.0
270
-6.5
18.1
19.1
21.0
950
9.5
61.8
65.9
69.6
490
15.5
34.4
37.3
41.9
FY18E
18.9
14.6
15.9
14.0
12.3
P/E (x)
FY19E
17.3
13.6
15.1
13.2
11.4
RoE (%)
FY17-19E CAGR (%)
FY20E FY18E FY19E FY20E USD rev.
EPS
16.7
31.5 32.9 30.2
7.6
3.5
12.3
20.0 19.8 20.0
8.6
5.1
13.7
16.1 16.1 15.9
6.0
6.2
12.5
24.9 23.8 22.9
9.8
4.9
10.1
17.4 16.9 17.0
8.8
8.9
Source: MOSL, Company
28 August 2017
2

Infosys
The Event: Nandan Nilekani returns, 4 Board members resign
INFO announced the appointment of Mr. Nandan Nilekani as non-executive
non-independent Chairman of the Board.
It also accepted the resignation of Mr. R. Seshasayee, Professor Jeffrey Lehman
and Professor John Etchemendy with immediate effect.
Dr. Sikka too stepped down as Executive Vice Chairman and as a Director.
With Nandan Nilekani as Chairman, Ravi Venkatesan stepped down as the Co-
Chairman of the Board; he would however continue as an Independent Director.
Locus of control back to Bangalore?
The changes mark the return of control to
the founders, and will result in new independent appointments to the Board,
that may establish the same over the longer run. A board rejig would result in a
resolution of the issues raised by NRN on the Board and its way of functioning.
Our worries after the events last week revolved around business stability at
INFO, which needed to be settled on two fronts; [1] Appointment of a new CEO
and [2] Peace between the Board and NRN. Given that primary issues raised by
NRN were around the Panaya acquisition and governance issues associated with
it, changes at the Board level were necessary to calm the tide. The second of the
two stands largely addressed after the development.
Process expedited, stability could be sooner:
Dr. Sikka resigned as CEO and MD
on August 18 and was appointed as Executive Vice Chairman (EVC) to facilitate a
smooth transition. However, within six days, major alterations have already
taken place. With a new leader on board to manage the transition, Dr. Sikka
stepped down from the EVC role. While the risk of negatively impacted business
performance remains, closure to backdrop hostilities is a welcome development
and in quick time that. Focus can now shift to appointment of new CEO and
chalking out the INFO strategy to get the business back on track.
New leadership would now be the focus:
With headway at the Board level, the
search and appointment of a new CEO would be top priority. Till then, the
possibility of some leadership flux and business disruption remains. Dr. Sikka’s
immediate resignation poses additional risk to some ongoing customer
engagements where he played a key part. Challenges around comforting
existing clients, especially during renewal of bread-n-butter contracts and
keeping competition at bay remain for now.
Key Takeaways from Nandan’s address to investors
Nandan’s role
The key deliverables for Nandan would be Board oversight, governance (emphasized
several times) and functioning. While no time frame has been defined at the
moment, Nandan would be around till the problem is solved, and would move on
once things are in the right direction. His key tasks would be:
Ensure stability and consensus so that there is no discord between various
stakeholders
Get employees’, among other stakeholders’ focus away from the noise and back
on business
Ensure that the CEO search process is effectively carried out
Make additions to the Board
Asses strategy and new initiatives; and define path going forward
28 August 2017
3

Infosys
New CEO search
Looking for a new CEO is of priority; the search-net for which will be broad and
will range across internal candidates, external candidates and Infosys alumni.
The new CEO would have the following qualities: be able to manage a global
company, accelerate strategy and execution, have technology prowess and
build/strengthen relationships with all stakeholders.
The search will not need to follow the reconstitution of the Board, and the two
activities will be carried out in parallel.
Friction between Board and founders is behind
NRN, other founders, the Board (in its previous state), management and various
institutional holders were all supportive of Nandan’s return at the helm. This
uniform acceptance indicates stability, and focus will now move to operationalizing
the broader agenda.
Governance lapses so far
Will look into all the issues raised so far by NRN, and will examine the dynamics
around it. Nandan is a strong follower of superior corporate governance standards
and will ensure that the right steps are taken once the matter is probed into.
However, the focus will be more forward-looking, with focus on returning to stable,
super-normal growth.
Business continuity and client relationships
The management team at Infosys is committed to ensure business stability and
unhampered client relationships. They will get in touch with customers and ensure
concerns, if any, are addressed. Need be, Nandan will step in to ensure there is no
disruption.
28 August 2017
4

Infosys
Valuation view
The strategy execution was on track so far:
INFO’s strategy ‘renew and new’ –
renewing the way of delivering existing services and also building new services
of the future - resonates with the changing landscape of technology demand.
Gradual progress on the strategy was helping INFO take steps towards regaining
its bellwether status with industry-leading growth at strong profitability. A small
metric of the same was INFO’s latest disclosure around revenues from new
areas. Since 1QFY15, nearly 50% of INFO USD2b incremental revenues have
come from new services and software which did not exist before, and now
constitute 8.3% of 1QFY18 revenues.
Addressed various pain points under new management:
Over FY16-FY17,
INFO’s improving traction is demonstrated in multiple areas:
Volume growth has picked up gradually from 9.3% in FY15 to 14.5% YoY in
FY16.
Attrition rate in high performance employees is down to 7.3% while overall
attrition is well within manageable levels.
Improvement in client mining—top-10 accounts, which were flattish till
1QFY15 have turned around impressively, till they hit a roadblock midway
through FY17.
Cost optimization levers have helped deliver on margins despite pricing
pressure—IT Services utilization excluding trainees is up to 84% in 1QFY18,
and this was merely 73% in FY13.
Product revenue for FY17 grew by 16.5% YoY, the second consecutive year
of strong growth (14.9% in FY15).
Recovery delayed amid turbulent environment:
The company faced multiple
challenges in FY17; execution issues in Consulting and the loss of the RBS
contract being the major ones, resulting in a loss of revenue growth
momentum. The weak exit rate has also resulted in a tepid guidance of 6.5-8.5%
CC growth in FY18. However, 1Q execution suggested that INFO remains on
track to meet the same, despite this needing acceleration in required CQGR of
2.2-2.9%, after having printed 1.4% CC CQGR in FY17. Moreover, recent INR
appreciation and investments laid towards augmenting onsite presence in the
US will take a toll on margins despite efforts on cost optimization and
automation.
At 14.6/13.6x FY18/FY19E earnings, INFO now is the least expensive stock
among the top-4 Indian IT. With the Founder-Board feud quickly redressed with
the appointment of Mr. Nandan Nilekani as non-executive non-independent
Director and Chairman of Board, along with resignation of four Directors. This
takes care of the risk from further downside following the resignation of
Dr.Sikka as the CEO, as the company now looks forward to the appointment of a
new leader alongwith Board’s reconstitution.
Near-term attractiveness may be higher given the proposed buyback. However,
beyond the event, the developments around new CEO, Panaya investigation and
INFO’s near term outlook will determine the extent of potential re-rating.
We had lowered our price target to INR1,050, by cutting the target multiple to
15x (from 17x), at some discount to TCS’ 16x. That will unlikely be breached for
now, with the sleuth of changes yet to take place, but offers upside from current
13.6x, driving our Buy rating.
5
28 August 2017

Infosys
However, further re-rating needs to see a combination of: [1] The back of search
process and focus on business growth, [2] At least comparable performance to
those setting the industry pace.
Key triggers
Quick appointment of a new CEO
Retention of guidance despite recent leadership and Board turmoil
Business earnings tailwinds from BFSI / Currency
Key risk factors
Adverse regulatory developments around current visa regime
Additional instability in leadership and execution from multiple exits
Issues in pockets like Retail, Life Sciences and Hi-tech weighing on overall
growth.
Exhibit 3: INFO 1-year forward PB chart
Max (x)
-1SD
P/B (x)
Min (x)
8.0
6.0
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 2: INFO 1 year forward PE chart
P/E (x)
27.0
20.0
13.0
6.0
Min (x)
Avg (x)
+1SD
24.8
20.0
6.8
5.1
3.1
2.7
4.1
17.0
14.1
10.5
14.9
4.0
2.0
2.8
Exhibit 4: Comparative valuation
Company Mkt cap Rating
(USD b)
TCS
72.9 Neutral
Infosys
31.5 Buy
Wipro
21.2 Neutral
HCL Tech
18.8 Neutral
TechM
6.2 Buy
TP
Upside
EPS (INR)
(INR)
(%) FY18E FY19E FY20E
2,350
-5.2 131.3 143.0 148.8
1,050
15.0
62.2
67.2
74.0
270
-6.5
18.1
19.1
21.0
950
9.5
61.8
65.9
69.6
490
15.5
34.4
37.3
41.9
FY18E
18.9
14.6
15.9
14.0
12.3
P/E (x)
FY19E
17.3
13.6
15.1
13.2
11.4
RoE (%)
FY17-19E CAGR (%)
FY20E FY18E FY19E FY20E USD rev.
EPS
16.7
31.5 32.9 30.2
7.6
3.5
12.3
20.0 19.8 20.0
8.6
5.1
13.7
16.1 16.1 15.9
6.0
6.2
12.5
24.9 23.8 22.9
9.8
4.9
10.1
17.4 16.9 17.0
8.8
8.9
Source: MOSL, Company
28 August 2017
6

Infosys
Operating metrics
Exhibit 5: Operating metrics
4QFY15
Verticals (%)
Banking and Financial Services
Insurance
Manufacturing
Retail & CPG
Transport & Logistics
Life Sciences
Healthcare
Energy & Utilities
Communication & Services
Others
Service Lines (%)
Development
Maintenance
Infrastructure Management
Testing
Business process management
Engg Services
Others
BITS
CSI
Products
BPM Platforms
Others
PPS
Geography (%)
North America
Europe
India
RoW
Clients (%)
Revenues from top client
Revenues from top 5 clients
Revenues from top 10 clients
Revenues from 2-5 client
Revenues from 6-10 clients
Revenues from Non-Top 10 clients
Clients added during the quarter
Total active client
27.2
6.4
23.8
15.1
1.6
5.1
1.7
4.5
8.3
6.3
1QFY16
27.1
6.0
24.1
15.0
1.5
5.6
2.0
4.2
8.4
6.2
2QFY16
27.2
5.6
23.8
14.9
1.9
5.9
1.9
4.7
7.9
6.2
3QFY16
27.6
5.9
22.8
14.7
1.9
5.8
1.9
5.1
8.0
6.3
4QFY16
27.4
5.4
22.7
15.0
2.0
5.7
2.0
5.2
8.6
6.2
1QFY17
27.2
5.6
22.8
15.5
1.9
5.8
1.9
4.7
9.4
6.3
2QFY17
27.4
5.7
22.5
14.9
1.9
4.7
2.1
4.8
9.4
6.1
3QFY17
27.2
6.1
22.5
14.6
2.0
4.6
2.3
5.0
9.1
6.6
4QFY17
27.4
6.1
22.4
14.1
2.0
4.6
2.0
5.0
9.9
6.5
1QFY18
27.1
6.2
22.2
14.2
1.9
4.6
2.0
5.2
10.4
6.2
14.3
19.7
8.1
8.9
5.3
3.5
2.5
62.3
32.7
3.4
1.0
0.6
5.0
14.0
19.9
8.3
8.9
5.0
3.5
2.7
62.3
32.8
3.2
1.0
0.7
4.9
14.0
19.6
8.7
9.0
4.9
3.3
2.8
62.3
32.8
2.8
1.0
1.1
4.9
14.1
19.1
7.5
9.2
4.9
3.4
3.0
61.2
33.8
3.0
0.9
1.1
5.0
13.7
19.7
8.0
9.0
5.0
3.4
2.8
61.6
33.2
3.2
0.8
1.2
5.2
14.4
19.5
8.3
9.1
4.9
3.5
2.8
62.5
32.1
3.1
0.9
1.0
5.0
15.6
18.1
8.4
9.2
4.9
3.7
2.7
62.6
32.1
3.0
2.1
0.4
5.5
15.5
17.0
8.6
9.1
4.9
3.9
3.0
62.0
32.4
3.2
1.9
0.5
5.6
15.3
16.8
8.5
9.0
5.1
4.0
3.0
61.7
32.6
3.2
1.9
0.5
5.6
15.4
16.7
8.4
9.3
5.0
4.1
3.1
62.0
32.6
Nm
Nm
Nm
5.4
62.8
23.1
2.5
11.6
63.2
22.4
2.2
12.2
63.2
22.9
2.3
11.5
62.5
23.2
2.8
11.5
61.9
23.4
3.0
11.7
62.0
23.0
2.7
12.3
61.5
22.5
3.4
12.6
62.0
22.2
3.4
12.4
62.3
22.1
3.2
12.4
61.1
22.4
3.6
12.9
3.5
13.9
22.7
10.4
8.8
77.3
52
950
3.7
14.0
23.0
10.3
9.0
77.0
79
987
3.7
14.0
22.8
10.3
8.8
77.2
82
1,011
3.5
13.9
22.6
10.4
8.7
77.4
75
1,045
3.6
13.7
21.8
10.1
8.1
78.2
89
1092
3.6
13.7
22.2
10.1
8.5
77.8
95
1126
3.5
13.1
21.8
9.6
8.7
78.2
78
1136
3.1
12.3
20.1
9.2
7.8
79.9
3.3
12.2
20.2
8.9
8.0
79.8
3.3
Nm
20.0
Nm
Nm
80.0
77
71
71
1152
1162
1162
Source: MOSL, Company
28 August 2017
7

Infosys
Exhibit 6: Operating metrics
QoQ Growth (%)
Verticals
Banking and Financial Services
Energy & Utilities
Insurance
Manufacturing
Others
Retailing
Telecom
Transportation
Service Lines
Development
Maintenance
Infrastructure Management
Consulting & Package Implementation
Testing
Engg Services
Business process management
Others
Products
Geography
North America
Europe
India
RoW
Clients
Revenues from top client
Revenues from top 5 clients
Revenues from top 10 clients
Revenues from Non-Top 10 clients
Revenues from 2-5 client
Revenues from 6-10 clients
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18
-1.2
-10.6
-1.1
-1.0
-5.5
-1.4
-7.1
3.8
2.9
-2.5
-2.0
5.8
9.3
3.8
5.8
-2.0
5.1
18.7
-1.0
4.7
8.4
5.3
-0.3
34.3
2.8
9.2
6.0
-3.6
0.6
-0.7
1.9
0.6
-0.5
3.6
-7.0
1.2
-0.6
3.7
9.2
7.0
2.2
-7.6
6.0
2.7
-3.7
5.7
11.8
-2.9
4.4
5.6
5.3
2.1
7.4
-0.6
3.4
3.4
-0.8
2.7
5.5
-1.4
-0.7
-3.4
-4.5
3.8
1.3
0.7
0.7
0.3
-2.3
-2.7
9.6
0.7
2.6
7.3
4.9
2.3
0.8
3.9
8.4
-2.0
-6.6
-1.7
-3.8
-2.4
-4.8
0.2
-4.5
5.8
5.8
2.3
5.6
7.1
4.8
4.5
4.5
-1.4
12.9
2.4
6.0
4.4
11.1
6.0
7.2
0.0
3.9
10.0
6.0
1.3
-1.9
-13.3
3.7
2.9
3.7
0.6
7.8
2.7
-1.3
4.8
8.4
-0.2
-0.6
1.6
3.7
-5.2
5.7
7.5
1.2
6.1
-1.1
3.4
5.3
0.2
-1.4
8.1
12.1
-4.0
4.7
3.4
4.6
9.3
3.4
11.1
-4.1
-2.0
-7.4
1.0
-0.5
-2.5
3.9
-1.4
2.0
8.3
-0.6
-0.5
-0.5
1.3
-0.4
3.3
4.8
7.4
-1.1
3.9
2.6
2.0
3.2
6.6
5.8
1.2
0.0
1.3
-0.8
-6.3
-2.7
-5.1
5.2
1.3
-8.0
9.9
6.2
8.4
10.8
-0.1
-0.6
1.9
22.5
0.6
0.6
2.5
8.9
3.4
2.4
0.5
-8.0
7.5
2.6
1.2
30.3
6.0
-0.6
-2.7
-1.4
-3.0
1.2
0.3
-5.2
0.7
1.2
4.6
16.1
7.4
6.5
1.7
-1.4
-3.0
0.2
-5.9
10.5
5.2
5.9
4.1
3.5
6.9
6.0
6.0
5.1
6.3
6.0
3.7
-4.8
-0.1
-0.3
0.9
1.6
-0.5
4.5
0.2
-2.0
2.7
-1.3
-5.4
2.2
2.2
4.1
1.7
2.2
7.3
0.6
-1.1
1.6
4.0
-1.7
5.9
-12.7
-7.4
-9.1
0.8
-5.5
-11.6
7.2
-0.1
1.2
0.6
-2.6
3.3
3.2
Nm
2.2
3.5
Nm
Nm
Source: MOSL, Company
28 August 2017
8

Infosys
Story in charts
Exhibit 7: Structural growth recovery playing out…
Revenue (USDm)
6.9
1.5
3.9
2.6
-0.4
4.4
1.1 1.9 1.7
3.9
-0.3 0.0
2.7
1.5
3.9
2.6
1.1
-0.4
Growth (CC, QoQ, %)
Exhibit 8: …minus weakness in 2HFY17
CC revenue growth (QoQ, %)
6.9
4.4
1.9 1.7
0.0
-0.3
3.9
2.7
Source: Company, MOSL
Source: Company, MOSL
Exhibit 9: Expect a higher normal for utilization (including
products) with focus on increasing productivity
Utilization Incl. Trainees
85
80
75
70
76.3 76.2 76.6
73.8
81.4
83.0 83.4
79.3
Utilization Excl. Trainees
84.5
83.1 82.4 82.6
82.0 81.4
80.9
80.8 81.1
80.8
Exhibit 10: Deal signings in 1QFY18 similar to that in the
previous quarter
Deal wins TCV (USDm)
1227
1207
983
688
962
809
806
664
76.6 76.3
75.1 75.5
77.2
78.4 78.5 78.8
Source: Company, MOSL
Source: Company, MOSL
Exhibit 11: Gap with industry growth has reduced
Revenue (USD m)
15.8
11.5
9.1
5.8
5.6
7.4
7.9
9.4
9.0
Growth (% YoY)
Exhibit 12: Attrition improving again
Voluntary Attrition rate (% LTM)
FY12
FY13
FY14
FY15
FY16
FY17 FY18E FY19E FY20E
Source: Company, MOSL
Source: Company, MOSL
28 August 2017
9

Infosys
Financials and Valuations
Key assumption
Y/E Mar
INR/USD Rate
Revenues (USD m)
Offshore Revenue (%)
Total Headcount
Net Addition
Gross Addition
Utilization Incl. trainees (%)
Utilization Excl. trainees (%)
Per Capita Revenue Productivity
(USD)
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2013
54.5
7,398
49.0
156,688
6,694
37,036
69.5
73.0
48,245
2013
403,520
19.6
115,570
28.6
11,284
104,286
23,590
0
127,876
33,670
26.3
0
94,206
94,206
13.3
2014
60.8
8,249
48.0
160,405
3,717
39,985
73.6
77.4
52,029
2014
501,330
24.2
136,340
27.2
13,740
122,600
26,690
-2,190
147,100
40,620
27.6
0
106,480
108,670
15.4
2015
61.2
8,711
48.8
176,187
15,782
53,386
76.2
82.0
51,760
2015
533,190
6.4
149,020
27.9
10,690
138,330
34,270
0
172,600
49,290
28.6
10
123,300
123,300
13.5
2016
65.7
9,501
47.3
194,044
17,857
52,545
76.5
81.7
51,325
2016
624,410
17.1
170,790
27.4
14,590
156,200
31,250
0
187,450
52,520
28.0
0
134,930
134,930
9.4
2017
67.1
10,208
46.8
200,364
6,320
44,235
78.9
82.8
51,764
2017
684,850
9.7
186,050
27.2
17,030
169,020
30,790
0
199,810
55,980
28.0
0
143,830
143,830
6.6
2018E
65.2
11,009
46.8
217,798
17,434
43,895
80.5
85.2
52,656
2018E
718,306
4.9
189,125
26.3
18,045
171,080
33,135
0
204,215
58,635
28.7
0
145,580
145,580
1.2
2019E
66.8
12,040
46.9
237,863
20,065
44,500
80.0
84.0
52,846
2019E
803,702
11.9
210,692
26.2
2020E
67.0
13,118
47.2
264,867
27,004
54,000
79.0
83.5
52,185
2020E
878,876
9.4
232,124
26.4
Income Statement
(INR Million)
18,632
192,060
31,677
0
223,737
64,884
29.0
0
158,853
158,853
9.1
18,896
213,227
32,351
0
245,579
71,218
29.0
0
174,361
174,361
9.8
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
2013
2,860
395,110
397,970
397,970
117,540
42,080
75,460
16,600
17,390
354,060
95,180
218,320
40,560
65,540
41,300
24,240
288,520
397,970
2014
2,860
472,440
475,300
475,300
140,790
55,250
85,540
18,320
45,230
421,460
111,620
259,500
50,340
95,250
56,180
39,070
326,210
475,300
2015
5,720
541,910
547,630
547,630
178,360
64,220
114,140
14,400
24,130
510,850
125,580
303,670
81,600
115,890
70,180
45,710
394,960
547,630
2016
11,440
606,350
617,790
617,790
208,370
74,510
133,860
18,930
21,050
580,050
143,590
326,970
109,490
136,100
79,760
56,340
443,950
617,790
2017
11,440
677,990
689,430
689,430
227,210
85,810
141,400
19,650
167,070
505,040
159,700
226,250
119,090
143,730
83,640
60,090
361,310
689,430
2018E
11,440
754,028
765,468
765,468
264,278
111,455
152,823
17,110
22,920
741,818
171,213
443,290
127,315
169,203
98,587
70,616
572,615
765,468
2019E
11,440
824,439
835,879
835,879
(INR Million)
2020E
11,440
899,302
910,742
910,742
292,278
130,087
162,191
17,110
22,920
821,582
191,567
491,434
138,581
187,924
110,479
77,445
633,658
835,879
320,278
148,983
171,295
17,110
22,920
904,925
209,486
544,881
150,559
205,507
120,491
85,016
699,418
910,742
28 August 2017
10

Infosys
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Fixed Asset Turnover (x)
Debtors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2013
41.2
46.2
174.1
10.5
25.5
2014
46.6
53.6
208.0
15.8
33.1
2015
53.9
58.6
239.6
18.5
34.3
2016
59.0
65.4
270.3
24.8
41.9
2017
62.9
70.4
301.6
25.8
40.9
2018E
63.7
71.6
335.0
30.0
47.1
2019E
69.5
77.7
365.7
34.0
48.9
2020E
76.3
84.6
398.5
38.0
49.8
15.5
14.0
10.2
2.8
3.4
2.7
14.5
13.0
9.1
2.5
3.0
2.8
14.7
13.0
8.8
2.3
2.7
3.3
13.6
12.1
7.8
2.0
2.5
3.7
12.4
11.1
6.8
1.8
2.3
4.2
25.7
25.7
6.5
86.1
-0.5
24.9
24.9
6.6
81.3
-0.5
24.1
24.1
5.7
86.0
-0.6
23.2
23.2
5.3
83.9
-0.5
22.0
22.0
5.2
85.1
-0.3
20.0
20.0
5.1
87.0
-0.6
19.8
19.8
5.3
87.0
-0.6
20.0
20.0
5.5
87.0
-0.6
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
CF from Inv. Activity
2013
115,570
21,960
-9,580
-32,930
95,020
-32,470
62,550
-18,040
-50,510
0
-890
-31,210
-32,100
12,410
205,910
218,320
2014
138,530
22,500
390
-38,780
122,640
-27,450
95,190
-22,580
-50,030
0
0
-31,430
-31,430
41,180
218,320
259,500
2015
149,020
35,450
-25,770
-49,290
109,410
-35,370
74,040
21,100
-14,270
0
0
-50,970
-50,970
44,170
259,500
303,670
2016
170,790
31,260
-24,275
-52,520
125,255
-37,278
87,977
3,287
-33,991
0
0
-68,403
-68,403
22,861
303,670
326,531
2017
186,050
30,750
-18,040
-55,980
142,780
-25,290
117,490
-132,201
-157,491
0
0
-71,168
-71,168
-85,879
326,531
240,652
2018E
189,125
33,695
5,175
-58,635
169,360
-26,928
142,432
144,150
117,222
0
0
-82,915
-82,915
203,668
240,652
444,319
2019E
210,692
31,677
-12,900
-64,884
164,586
-28,000
136,586
0
-28,000
(INR Million)
2020E
232,124
32,351
-12,313
-71,218
180,944
-28,000
152,944
0
-28,000
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
0
0
-93,970
-93,970
42,616
444,319
486,935
0
0
-105,025
-105,025
47,919
486,936
534,855
28 August 2017
11

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Infosys
N OT E S
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities in
the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a)
from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and
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research report.
Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject company in
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In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
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d)
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MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
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The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though
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indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Disclosure of Interest Statement
Analyst ownership of the stock
Infosys
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
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The
person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this
information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth
management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
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